Good news: the UNIX copyrights owned by Novell will not fall in the hands of Microsoft as part of the IP purchase by Redmond. "Novell will continue to own Novell's UNIX copyrights following completion of the merger as a subsidiary of Attachmate," states John Dragoon, Chief Marketing Officer at Novell. Yeppers.

This is what is referred to as a “reverse triangular merger.” In this type of transaction, the acquired company continues its corporate existence, since in a merger the parties are free to designate which company will be the “surviving corporation.” Attachmate will therefore form an empty shell company before the closing, all of whose shares will be owned by Attachmate. On the closing date, that company will merge into Novell, rather than the other way around. This transactional structure is usually used to achieve two primary goals:

1. The assets of the acquirer are insulated from any unknown liabilities that the acquired company may have, because the acquired company will operate as a wholly owned subsidiary, rather than be merged into the acquiring company itself.

2. It will lessen a major headache under other structures, which is getting the permission of many hundreds of third parties to assign their contracts from Novell to the acquirer. While every company seeks to limit the number of contracts that it signs that require such permissions, granting this term is sometimes unavoidable (and especially if you want the same right in return). Since Novell will be the surviving legal entity, many of these contracts will not, under their terms, technically be “assigned,” even though the control of Novell will have changed (some contracts, however, will have been drafted more tightly, and will still require consent).

As a result of this structure, all of Novell’s existing contracts, licenses, debts and other legal rights and obligations will continue as they were before the transaction occurred.